3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

VOL. 495, JULY 17, 2006 301

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

*
G.R. No. 148106. July 17, 2006.

EURO-MED LABORATORIES, PHIL., INC., represented

by LEONARDO H. TORIBIO, petitioner, vs. THE
PROVINCE OF BATANGAS, represented by its Governor,
HON. HERMILANDO I. MANDANAS, respondent.

Jurisdictions; The doctrine of primary jurisdiction holds that

relief must first be obtained in an administrative proceeding before
resort to the courts is had even if the matter may well be within
their proper jurisdiction.—The doctrine of primary jurisdiction
holds that if a case is such that its determination requires the
expertise, specialized training and knowledge of an
administrative body, relief must first be obtained in an
administrative proceeding before resort to the courts is had even
if the matter may well be within their proper jurisdiction. It
applies where a claim is originally cognizable in the courts and
comes into play whenever enforcement of the claim requires the
resolution of issues which, under a regulatory scheme, have been
placed within the special competence of an administrative agency.
In such a case, the court in which the claim is sought to be
enforced may suspend the judicial process pending referral of
such issues to the administrative body for its view or, if the
parties would not be unfairly disadvantaged, dismiss the case
without prejudice.

Same; Commission on Audit (COA); The enforcement of a

claim against a local government unit is within the domain of the
Commission on Audit (COA).—Petitioner was seeking the
enforcement of a claim for a certain amount of money against a
local government unit. This brought the case within the COA’s
domain to pass upon money claims against the government or any
subdivision thereof under Section 26 of the Government Auditing
Code of the Philippines: The authority and powers of the
Commission [on Audit] shall extend to and comprehend all
matters relating to x x x x the examination, audit, and settlement
of all debts and claims of any sort due from or owing to the

www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 1/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

Government or any of its subdivisions, agencies, and

instrumentalities. x x x x.

Same; Liquidated claims or readily determinable vouchers

and such other papers within the reach of accounting officers are
within the COA’s jurisdiction.—The scope of the COA’s authority
to take cognizance of claims

_______________

* SECOND DIVISION.

302

302 SUPREME COURT REPORTS ANNOTATED

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

is circumscribed, however, by an unbroken line of cases holding

statutes of similar import to mean only liquidated claims, or those
determined or readily determinable from vouchers, invoices, and
such other papers within reach of accounting officers. Petitioner’s
claim was for a fixed amount and although respondent took issue
with the accuracy of petitioner’s summation of its accountabilities,
the amount thereof was readily determinable from the receipts,
invoices and other documents. Thus, the claim was well within
the COA’s jurisdiction under the Government Auditing Code of
the Philippines.

Same; Petitioner’s claim which involved compliance with

applicable auditing laws and rules on procurement are not within
the usual area of knowledge, experience and expertise of most
judges but within the special competence of COA auditors and
accountants.—Petitioner’s money claim was founded on a series of
purchases for the medical supplies of respondent’s public
hospitals. Both parties agreed that these transactions were
governed by the Local Government Code provisions on supply and
property management and their implementing rules and
regulations promulgated by the COA pursuant to Section 383 of
said Code. Petitioner’s claim therefore involved compliance with
applicable auditing laws and rules on procurement. Such matters
are not within the usual area of knowledge, experience and
expertise of most judges but within the special competence of
COA auditors and accountants. Thus, it was but proper, out of

www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 2/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

fidelity to the doctrine of primary jurisdiction, for the RTC to

dismiss petitioner’s complaint.

Same; The court may raise the issue of primary jurisdiction

sua sponte and its invocation cannot be waived by the failure of
the parties to argue it as the doctrine exists for the proper
distribution of power between judicial and administrative bodies
and not for the convenience of the parties.—Petitioner argues,
however, that respondent could no longer question the RTC’s
jurisdiction over the matter after it had filed its answer and
participated in the subsequent proceedings. To this, we need only
state that the court may raise the issue of primary jurisdiction
sua sponte and its invocation cannot be waived by the failure of
the parties to argue it as the doctrine exists for the proper
distribution of power between judicial and administrative bodies
and not for the convenience of the parties.

PETITION for review on certiorari of the orders of the

Regional Trial Court of Batangas City, Br. 84.
The facts are stated in the opinion of the Court.
     Gilda E. Guillermo for petitioner.
303

VOL. 495, JULY 17, 2006 303

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

CORONA, J.:
1
Before the Court is a petition for review on certiorari
assailing, on pure questions of law, the March 7 and May
16, 2001 orders2
of the Regional Trial Court (RTC) of
Batangas City in Civil Case No. 5300. 3
Civil Case No. 5300 was a complaint for sum of money
filed by petitioner Euro-Med Laboratories, Phil., Inc.
against respondent Province of Batangas. The pertinent
portions of the complaint read:

3. On several occasions, particularly from the period

of 19 August 1992 to 11 August 1998, defendant
[respondent here], thru its various authorized
representatives of the government hospitals
identified and listed below, purchased various
Intravenous Fluids (IVF) products from the plaintiff
[petitioner here], with an unpaid balance of Four
Hundred Eighty Seven Thousand Six Hundred
Sixty-Two Pesos and Eighty Centavos
(P487,662.80), as of 28 February 1998, broken down

www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 3/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

as follows: x x x x which purchases were evidenced

by invoices duly received and signed by defendant’s
authorized representatives, upon delivery of the
merchandise listed in said invoices.
4. Under the terms and conditions of the aforesaid
invoices, defendant agreed and covenanted to pay
plaintiff, without need of demand, its obligations in
the above-enumerated invoices on various terms
indicated therein.
5. Plaintiff made several demands for defendant to
pay its accountabilities, including setting up several
dialogues with plaintiff’s representatives, but these
proved fruitless.
6. Despite repeated demands by plaintiff for
defendant to pay and settle its unpaid and
outstanding accounts under the aforementioned
invoices, said defendant
4
has failed and still fails to
comply therewith.
5
In its answer, respondent admitted most of the allegations
in the complaint, denying only those relating to the unpaid
balance supposedly still due petitioner. Respondent alleged
that some payments it

_______________

1 Under Rule 45 in relation to Rule 41, Sec. 2 (c) of the Rules of Court.
The petition was captioned erroneously as a petition for certiorari. Rollo,
pp. 60-71.
2 Branch 84, presided over by Executive Judge Paterno V. Tac-an.
3 Rollo, pp. 28-32.
4 Id.
5 Id., pp. 33-34.

304

304 SUPREME COURT REPORTS ANNOTATED

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

had already made were not reflected in the computation set

forth in the complaint and that it was continuously
exerting genuine and earnest
6
efforts “to find out the true
and actual amount owed.” Pre-trial and trial followed.
At the conclusion of petitioner’s presentation 7
of
evidence, respondent filed a motion to dismiss the
complaint on the ground that the primary jurisdiction over
petitioner’s money claim was lodged with the Commission
www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 4/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

on Audit (COA). Respondent pointed out that petitioner’s

claim, arising as it did from a series of procurement
transactions with the province, was governed by the Local
Government Code provisions and COA rules and
regulations on supply and property management in local
governments. Respondent argued that the case called for a
determination of whether these provisions and rules were
complied with, and that was within the exclusive domain of
COA to make.
Finding the motion to8 be well-taken, the RTC issued on
March 7, 2001 an order dismissing petitioner’s complaint
without prejudice to the filing of the proper money claim9
with the COA. In a subsequent order dated May 16, 2001,
the RTC denied petitioner’s motion for reconsideration.
Hence, this petition.
The resolution of this case turns on whether it is the
COA or the RTC which has primary jurisdiction to pass
upon petitioner’s money claim against the Province of
Batangas. We rule that it is the COA which does.
Therefore, we deny the petition.
The doctrine of primary jurisdiction holds that if a case
is such that its determination requires the expertise,
specialized training and knowledge of an administrative
body, relief must first be obtained in an administrative
proceeding before resort to the courts is had even if 10the
matter may well be within their proper jurisdiction. It
applies

_______________

6 Id.
7 Id., pp. 89-92.
8 Id., pp. 23-25.
9 Id., p. 26.
10 Industrial Enterprises, Inc. v. Court of Appeals, G.R. No. 88550, 18
April 1990, 184 SCRA 426, 431-432.

305

VOL. 495, JULY 17, 2006 305

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

where a claim is originally cognizable in the courts and

comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory
scheme, have been placed within the special competence of
an administrative agency. In such a case, the court in
which the claim is sought to be enforced may suspend the
www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 5/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

judicial process pending referral 11

of such issues to the
administrative body for its view or, if the parties would
not be unfairly
12
disadvantaged, dismiss the case without
prejudice.
This case is one over which the doctrine of primary
jurisdiction clearly held sway for although petitioner’s
collection suit
13
for P487,662.80 was within the jurisdiction
of the RTC, the circumstances surrounding petitioner’s
claim brought it clearly within the ambit of the COA’s
jurisdiction.
First, petitioner was seeking the enforcement of a claim
for a certain amount of money against a local government
unit. This brought the case within the COA’s domain to
pass upon money claims against the government or any
subdivision thereof under Section 14
26 of the Government
Auditing Code of the Philippines:

The authority and powers of the Commission [on Audit] shall

extend to and comprehend all matters relating to x x x x the
examination, audit, and settlement of all debts and claims of any
sort due from or owing to the Government or any of its
subdivisions, agencies, and instrumentalities. x x x x.

_______________

11 Id., at p. 432.
12 2 Am Jur 2d, Administrative Law § 513. See also Aircraft & Diesel
Equipment Corp. v. Hirsch, 331 U.S. 752, 767 (1947): “The very purpose of
providing either an exclusive or an initial and preliminary administrative
determination is to secure the administrative judgment either, in the one
case, in substitution for judicial decision or, in the other, as foundation for
or perchance to make unnecessary later judicial proceedings.”
13 BP 129, Sec. 19 (8), as amended by RA 7691, confers on the RTC
jurisdiction in civil cases “in which the demand, exclusive of interests,
damages of whatever kind, attorney’s fees, litigation expenses, and costs x
x x x exceeds [P300,000] or, in such other cases in Metro Manila, where
the demand, exclusive of the abovementioned items exceeds [P400,000].”
14 PD 1445.

306

306 SUPREME COURT REPORTS ANNOTATED

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

The scope of the COA’s authority to take cognizance of

claims is circumscribed, however, by an unbroken line of
cases holding statutes of similar import to mean only
liquidated claims, or those determined or readily
www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 6/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

determinable from vouchers, invoices, and15 such other

papers within reach of accounting officers. Petitioner’s
claim was for a fixed amount and although respondent took
issue with the accuracy of petitioner’s summation of its
accountabilities, the amount thereof was readily
determinable from the receipts, invoices and other
documents. Thus, the claim was well within the COA’s
jurisdiction under the Government Auditing Code of the
Philippines.
Second, petitioner’s money claim was founded on a
series of purchases for the medical supplies of respondent’s
public hospitals. Both parties agreed that these
transactions were governed by the Local Government 16
Code
provisions on supply and property management and their
implementing
17
rules and regulations promulgated
18
by the
COA pursuant to Section 383 of said Code. Petitioner’s
claim therefore involved compliance with applicable
auditing laws and rules on procurement. Such matters are
not within the usual area of knowledge, experience and
expertise of most judges but within the special competence
of COA auditors and accountants. Thus, it was but proper,
out of fidelity to the doctrine of primary jurisdiction, for the
RTC to dismiss petitioner’s complaint.
Petitioner argues, however, that respondent could no
longer question the RTC’s jurisdiction over the matter after
it had filed its an-

_______________

15 Compañia General de Tabacos v. French and Unson, 39 Phil. 34

(1918); Philippine Operations, Inc. v. Auditor General, 94 Phil. 868 (1954);
Insurance Company of North America v. Republic, 128 Phil. 44; 20 SCRA
1159 (1967); Firemen’s Fund Insurance Co. v. Republic, 128 Phil. 494; 21
SCRA 470 (1967).
16 These provisions are found in Title VI, Book II of the Local
Government Code.
17 COA Circular No. 92-386.
18 Section 383. Implementing Rules and Regulations.—The Chairman of
the Commission on Audit shall promulgate the rules and regulations
necessary to effectively implement the provisions of this Title, including
requirements as to testing, inspection, and standardization of supply and
property.

307

VOL. 495, JULY 17, 2006 307

Euro-Med Laboratories, Phil., Inc. vs. Province of Batangas

www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 7/8
3/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 495

swer and participated in the subsequent proceedings. To

this, we need only state that the court may raise the issue
of primary jurisdiction sua sponte and its invocation cannot
be waived by the failure of the parties to argue it as the
doctrine exists for the proper distribution of power between
judicial and administrative 19
bodies and not for the
convenience of the parties.
WHEREFORE, the petition is hereby DENIED. The
March 7, and May 16, 2001 orders of the Regional Trial
Court of Batangas City are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.

          Puno (Chairperson), Sandoval-Gutierrez, Azcuna

and Garcia, JJ., concur.

Petition denied, orders affirmed.

Note.—“Primary jurisdiction” usually refers to cases

involving specialized disputes where the practice is to refer
the same to an administrative agency of specialized
competence in observance of the doctrine of primary
jurisdiction. (Honasan II vs. Panel of Investigating
Prosecutors of the Department of Justice, 427 SCRA 46
[2004])

——o0o——

_______________

19 2 Am Jur 2d, Administrative Law § 513.

308

© Copyright 2020 Central Book Supply, Inc. All rights reserved.

www.central.com.ph/sfsreader/session/00000170e8cc3907c674d181003600fb002c009e/t/?o=False 8/8